Happy Friday Everyone 👋
Did you catch Genevieve live on the set of Fox Business with Charles Payne this week? Keep reading for a link to the full video below!
SIX things you need to know this week in 60 seconds.
Highest inflation in 31 years
Fundamentals-shmundamentals
Roblox is life
Did you hear that?
Crypto reaches $3T
Elon Musk uses a lifeline, asks the audience
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1. MACRO
Highest inflation in 31 years
In news that should’ve surprised absolutely no one, inflation data came in hotter than expected. Prices for consumers have increased 6.2% since October 2020, the fastest annual rise since bell-bottoms and platform shoes were in style (1990).
Leading the way were food, shelter, cars, and worst of all energy, where consumers saw the biggest jump in their bills since 2009. PPI data also came in above consensus thanks mostly to a 1.2% increase in the price for goods.
Speaking of goods — demand is through the roof! Consumers are ready to splurge over the holidays with over $2T in excess savings accumulated over the pandemic.
Credit card usage has increased by $17B in both Q2 and Q3 which is in line with pre-pandemic patterns, and retail sales are expected to rise at least 8.5% through the end of a year to a record $843B.
GRIT’S TAKE: Strong consumer spending is obviously good for the economy (~70% of GDP), but it’s a double-edged sword that’s putting pressure on an already strained supply chain, and that’s not helping with rising prices.
GRIT’S ACTION: I own logistics stock Descartes Systems.
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2. DEALS & IPOs
Fundamentals-shmundamentals
In the words of GRIT’s Sergei Perfiliev: “Fundamentals-shmundamentals”.
Rivian Automotive became one of the U.S.’ biggest automakers on Wednesday despite only being in the early stages of delivering its first vehicles. But hey, at least we know they’re not just rolling cars down a hill!
The new EV bad boy on the block has yet to generate any real revenue, and projections for Q3 are between zero and $1M. That’s good if you’re in the dog walking business, not so much when you’re selling cars.
They’ve also been plagued by the same supply chain constraints that have been cramping production for automakers globally. Still, shares closed nearly 30% above their offering price, which put Rivian’s market cap at roughly $86B (or bigger than Ford).
GRIT’S TAKE: This is the EV equivalent of the green premium we saw last week with Allbirds. Investors are willing to pay up even when the fundamentals are lagging! Also, the Tesla effect…
GRIT’S ACTION: I own a private Carbon deal that is about to go public and I might have made 100-200% on it. Can’t wait to tell you which!
3. STOCK MARKET
Roblox is life
One thing that has become clear as the world returns to its pre-pandemic routines: users aren’t going to spend any less time on Roblox than they were before. In fact, users of all ages spent 28% more time on the site than they did a year earlier.
Revenue excluding deferred revenue followed, more than doubling in Q3 as bookings rose 28%. And if you thought that the re-opening would put a dent in the growth numbers, you would have been sorely mistaken — average daily users increased by 31% to 47.3M!
Much of that growth (75%) even came from Asia, despite China policing how much time kids spend on video games.
GRIT’S TAKE: Roblox now has more users over the age of 13 than under 13! These are users who grew up on the game and will likely serve as the loyal user core for the company’s proposed metaverse (read: they’re not Team Meta).
GRIT’S ACTION: I own Roblox and been buying more the last month, guess it was the right call ; )
4. COMMODITIES
Did you hear that?
That was the sound of a gold bug getting its wings.
It happens every time gold makes a relative high, which it just did by getting to mid-June levels thanks to the aforementioned hot inflation data.
In normal times (whatever that even means anymore), inflation at 30-year highs would be a gold bug’s dream scenario, but the precious metal just doesn’t offer the same shine it used to.
In any case, gold should see continued momentum off this 5-month high if real yields keep declining.
GRIT’S TAKE: But that doesn’t mean you need to buy it!
GRIT’S ACTION: I might be buying a speculative gold deal… but only because I am getting in super early.
5. CRYPTO
Crypto reaches $3T
I’m not going to say that Genevieve talking crypto on Fox Business had something to do with Bitcoin and Ethereum reaching fresh all-time highs this week, but I’m not going to not say it!
It was a big week for crypto all around as the total value of the market is now over $3T (with a T)! Even so, many still consider it “worthless”…
Tim Cook is not one of those people. He was recently asked whether he owns bitcoin or ethereum and he confirmed he did.
“I do. I think it’s reasonable to own it as part of a diversified portfolio.”
It shouldn’t be a surprise that the head of the biggest tech company in the world has been interested in crypto “for a while”. No kidding!
GRIT’S TAKE: If you missed it, check out Genevieve’s full appearance live on set with Charles Payne here!
GRIT’S ACTION: Oops I bought more Bitcoin and Ethereum this week ; )
6. ENTERTAINMENT
Elon Musk uses a lifeline, asks the audience
There’s been a lot of talk recently over how America’s billionaires should be taxed. So Elon Musk, the most eccentric of billionaires, did what anyone else in his shoes would have done: he put the fate of 10% of his Tesla shares in the hands of Twitter. They voted to sell.
Throughout the week, Elon has unloaded ~$5B worth of shares.
For those keeping score at home, 10% of Elon’s Tesla shares = roughly $21B which means he’s got a ways to go before making good on his pledge to abide by the outcome of the poll.
It was well known that Musk needed to sell shares to pay taxes, but investors weren’t expecting him to drop this Twitter poll bomb on them. The stock took a hit when markets opened on Monday.
GRIT’S TAKE: Even though the price has dropped from last week’s highs, it’s still within range of Dr. Patel’s target price of $1264 per share!
GRIT’S ACTION: I love Elon but not his stock valuation 🥰
*SOURCES
2. Reuters
3. CNBC
5. CNBC
6. CNN
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